Electrification Push in Bid unveiled by Nissan Motors

Nissan Motor Co said it would spend 2 trillion yen ($17.59 billion) over five years to speed up vehicle electrification to catch up with competitors in one of the fastest-growing segments of the auto industry. This is the first time Japan’s No. 3 automaker, one of the world’s first mass-market electric vehicle manufacturers with its Leaf model more than a decade ago, unveiled a comprehensive electrification strategy. However, as competitors such as Toyota Motor Corp and younger entrants such as Tesla Inc move on with their electric-car plans, Nissan will invest twice as much as it spent in the previous decade to gain a piece of the EV market.

Nissanannounced on Monday that by 2030, it plans to release 23 electrified vehicles, including 15 electric vehicles (EVs), and that lithium-ion battery costs will drop by 65 percent. It also intends to launch game-changing all-solid-state batteries before the end of March 2029. According to Chief Executive Makoto Uchida, these agreements will make EVs more accessible to a broader range of drivers. In an online presentation, he stated, “We will advance our endeavour to democratise electrification.” On Monday,  stock fell 5.6 percent, underperforming its key competitors and outperforming the 1.6 percent decrease in the benchmark Japan index.

Several analysts met Nissan strategy with skepticism, who pointed out that it was already lagging behind its competitors in terms of electrification. According to Masayuki Otani, senior analyst at Securities Japan Ltd, auto stocks were also sliding on Monday due to concerns that the new coronavirus type will stifle manufacturing. Moreover, long-term strategy comes at a time when the market may not be ready for it. It may be claimed that it reflects a significant increase in investment, yet it has a cautious aspect.

According to the International Energy Agency, global electric car registrations increased by 41% in 2020, despite the entire car market contracting by nearly a sixth (IEA). Major automakers, including General Motors and Ford Motor Co, signed a declaration committing to phase out fossil fuel vehicles by 2040 at the United Nations climate summit in Glasgow this month. Nissan, on the other hand, has not stated that gasoline vehicles will be phased out. Instead, it announced on Monday that by 2030, 50% of its vehicle mix, including EVs and e-Power hybrids, will be electrified. According to COO Gupta, the aim is to just a starting point that could evolve.